Long-term Care Insurance Policy Dropping in the U.S. from 1996 to 2000: Evidence and Implications for Long-term Care Financing

Paul McNamara and Nayoung Lee
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Nayoung Lee: University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics, 1301 West Gregory Drive, 437 Mumford Hall, Urbana, Illinois 61801, US

The Geneva Papers on Risk and Insurance - Issues and Practice, 2004, vol. 29, issue 4, 640-651

Abstract: While the market for private long-term care insurance in the U.S. has grown dramatically, consumer advocates have argued for increased regulatory attention and for broadened consumer education programs concerning long-term care insurance. We analyse Health and Retirement Survey data from 1996, 1998, and 2000 using a zero-inflated negative binomial regression model of the counts of consecutive periods of long-term care insurance coverage. We find that while a significant proportion of Americans over the age of 50 purchase long-term care insurance, many of these purchasers drop their coverage within a five-year period. This finding raises questions for long-term care insurance researchers and it contains implications for market regulators, public policy makers interested in financing long-term care, as well as for insurance companies and consumer advocates. The Geneva Papers on Risk and Insurance (2004) 29, 640–651. doi:10.1111/j.1468-0440.2004.00307.x

Date: 2004
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